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Modern awards - assessing coverage and application

In Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd, a Full Court of the Federal Court of Australia was required to consider how to approach determining coverage and application of awards. In doing so, the Court provided a timely reminder that determining award application is not always a straightforward process.

Background

Coles established an online business in 1999 as part of its existing supermarket business. Essentially, this involves customers submitting grocery orders online; orders being picked off the shelves and packed by “Personal Shoppers”; and then delivered to customers by “Customer Service Agents” (CSAs). The CSAs’ role involved driving trucks and making deliveries (the overwhelming part of their job), as well as loading the trucks, stocktake duties, shelf restocking and general store cleaning.

Coles paid the CSAs in accordance with the General Retail Industry Award 2010 (the Retail Award). The Transport Workers Union (TWU) argued that the Road Transport and Distribution Award 2010 (the Transport Award) covers and applies to the CSAs’ employment, and that some CSAs were underpaid wages and other entitlements as prescribed by the Transport Award.

At first instance, the primary judge found that the Retail Award covered the CSAs’ employment, and that the Transport Award did not provide coverage, as the “substantial character” of Coles’ business was not in transport.

The TWU appealed the primary judge’s finding to the Full Court. In respect of the issue of appropriate award coverage, the Court was required to address the following key questions:

Did the Transport Award and/or the Retail Award cover the employment of CSAs?

If any or both of these awards covered CSAs, which one(s) applied to the employment of CSAs?

​Decision

The Full Court found that both the Retail Award and the Transport Award covered the CSAs. The Retail Award was, however, held to apply to the CSAs in their employment to the exclusion of the Transport Award on the basis that the classifications in the Retail Award more appropriately matched the work performed by the CSAs.

Award coverage

The Full Court held that the primary judge erred in finding that the Transport Award did not cover the CSAs, as the “substantial character” of Coles’ business was not in transport.

Rather, the Court looked at the ordinary meaning of the words in the award to determine which employees were intended to be covered. The Transport Award expressly extended to the transport of goods ancillary to the principal business.

The delivery of supermarket products and the other tasks that CSAs performed was found by the Full Court to be clearly ancillary to Coles’ principal business as a supermarket chain. As such, the CSA role was found to be covered by the Transport Award.

Award application

Where multiple awards cover an employee, the award which will apply will be that which is best matched with the work of the employee. This is due to the standard provision in modern awards which states:

“Where an employer is covered bymore than one award, an employee ofthat employer is covered by the award classification which is most appropriate tothe work performed by the employee andto the environment in which the employeenormally performs the work”.

The Full Court agreed with the primary judge’s approach of looking at the degree of specificity in which the respective classifications covered the work of the employee. In this case, the CSA role involved more than merely the delivery of goods. The role also involved other duties, such as stocktake, shelf restocking and general store cleaning. The Full Court therefore agreed with the primary judge that the Retail Award provided more appropriate coverage to the work of CSAs.

CHECKLIST FOR EMPLOYERS

Remember that employees may be covered by multiple awards, but only one award can apply to an employee in their role.

When assessing award coverage, look at the objective meaning of the award’s ‘coverage’ or ‘scope’ clause.

Modern industry awards generally apply not only to employees working for an employer whose primary business is in that industry, but also to employees working in activities that are ‘ancillary’ to the employer’s primary business.

When you identify a modern award that may cover your employee(s), make sure you look for other awards that may also provide appropriate coverage.

Where an employee is covered by multiple awards, to determine which award provides the most appropriate coverage, consider the employee’s role and responsibilities as a whole, not just what the employee will primarily be doing.

Compare jurisdictions: Employment & Labor: North America

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